Bond prices fell early in the day, sending yields higher. The yield on the benchmark 10-year Treasury note went as high as 1.79% before falling back to 1.72% in late trading, little changed from late Wednesday.
President Donald Trump spooked the markets last week when he threatened to impose 10% tariffs on all Chinese imports that haven’t already been hit with tariffs of 25%. China retaliated on Monday and allowed its currency, the yuan, to weaken against the U.S. dollar.
China stabilized the yuan on Tuesday and that helped lift U.S. stocks following their worst day of the year. But, central banks in New Zealand, India and Thailand cut key interest rates on Wednesday, sending U.S. stocks into an early dive before recovering at the end of the day.
The last couple of weeks feel even more topsy-turvy following the months of relative calm that investors had been enjoying. Before Monday’s 3% drop for the S&P 500, they hadn’t seen a loss of even half that size since mid-May.
Since this bull market began over a decade ago, the S&P 500 has had 24 days where it lost at least 3%. That averages out to one every five months or so, but they don’t happen in such a regular fashion.
Instead, the market tends to shift between periods of calm and sharp bursts of volatility. In 17 of the 24 times that the S&P 500 fell 3%, it either preceded or followed another such drop within a month. So Monday’s 3% fall may be the precursor to more, if history is a guide.
“The foreseeable future is going to be a lot of noise,” said J.J. Kinahan, chief market strategist for TD Ameritrade.
The last time the stock market had a drop of 3% was on Dec. 4, when investors